Gold settled about 1 percent higher on Thursday, gaining support from the European Central Bank's decision not take fresh action to inject liquidity into the eurozone's financial system, which boosted the euro versus the dollar.
The ECB kept interest rates on hold, while failing to loosen lending conditions to ward off the threat of excessively low inflation and underpin a fragile recovery.
That prompted a jump in the euro, which was reflected in a weaker dollar index, down 0.6 percent, while earlier strength in European equities waned.
"The euro/dollar is bouncing because there was a little bit of expectation that (ECB President Mario) Draghi may have introduced some measures to boost liquidity but he did nothing... that is giving gold a little bit of boost to gold," Saxo Bank senior manager Ole Hansen said.
"Also, we had some technical resistance at $1,338 and we took that out, so we are seeing a few stops being triggered taking it up to the $1,345 area."
Market attention is now likely to turn to the U.S. nonfarm payroll figures on Friday, which should help gauge the strength of the labour market in the world's top economy and the implications for the pace of the Federal Reserve's stimulus reduction.
"We'll see the nonfarm payrolls number tomorrow ... we need a significant deviation from expectations for that to have a proper impact," Hansen added.
Soft data on U.S. private hiring and services sector growth lifted the metal in the previous session. However, as the U.S. economic recovery seems to have been affected by severe weather in the first months of the year, investors are hungry for more evidence the slowdown is limited.
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